China-Cuba Relations, More Rhetoric than Trade & Investment
China points out ‘the unwillingness of Cuban leaders to adopt market-oriented reforms’.
HAVANAS TIMES – Cuba owes large Chinese companies, such as Huawei and Yutong, “hundreds of millions of dollars each,” says a foreign businessman who trades with the Island. The prestigious British economic newspaper Financial Times (FT) published this Monday a devastating article on the economic relations between the Asian giant and Cuba, which makes it clear that, beyond the rhetoric, Beijing is not willing to gamble money on such an unproductive partner.
“The shortage of raw materials and an unproductive economy leave the Island with little to export to China, while imports have decreased in recent years, as the tightening of US sanctions seriously aggravated Havana’s chronic default problems and exhausted credit lines,” says the Financial Times.
One of the unknown facts so far is that the sugar export contract from Cuba to China, through which the Island sent more than 400,000 tons, has been canceled due to lack of production. Apart from that, only nickel, zinc and luxury cigars remain to sell to China, in addition to doctors sent to numerous countries – “in exchange for hard currency,” the FT points out – and cooperation in biotechnology.
On the other hand, although Cuba continues to import from China, the data show that acquisitions have fallen. While in 2017 the amount was worth 1.7 billion dollars, in 2022 – with the latest available data – it was only 1.1 billion. Cuban economist Omar Everleny Pérez said that the amount that China invests in the island – despite being unknown – is an “absurdly low” amount when compared to the 160 billion dollars that Beijing has invested in Latin America and the Caribbean since 2005. China’s main allies in the region are Argentina, Brazil, Chile, Ecuador, Mexico, Peru and Venezuela, all of them important exporters of raw materials.
“China is not Cuba’s sugar daddy,” Fulton Armstrong, former US intelligence officer for Latin America, told the British newspaper. “It is mainly a relationship of declarations of solidarity, not a strategic partnership for either one of them.”
According to the article, although Beijing publicly spouts declarations of solidarity with Havana, in private it is appalled at the “lack of will of Cuban leaders to decisively implement a market-oriented reform program, despite the obvious dysfunction of the current situation.” Chinese officials have insisted many times to Cuban peers that the economy turn to a version close to that of the Asian country, with no result.
The article points out that China has contributed significantly to the “energy revolution” promoted by Fidel Castro at the end of the 20th century, as well as to the infrastructure reform in recent years, with special emphasis on cybersecurity, digital technologies and transport infrastructures and equipment. This was not in vain, the text points out, since Beijing is still Havana’s second largest trading partner, only behind Caracas.
“But Chinese imports have decreased a lot in general,” says a Western businessman in Havana. “Exporters are moving away from the credit lines between China and Cuba and are moving towards the private sector.”
William LeoGrande, an expert on Cuba and professor of Public Policy at American University, told the FT that China is a country that is not very inclined to give donations. “Cubans right now are in a position where they need charity and don’t have much to offer in return,” he says. Although Beijing promised to send 20,408 tons of rice to the Island throughout 2024, Cuba needs 36,000 tons every month, a fact that exposes the low importance of the crumbs thrown to Cuba by that agreement.
The Chinese president also gave 100 million dollars after the visit of Miguel Díaz-Canel on his 2023 tour through several friendly countries, but it is not significant in relation to what Beijing could contribute if it had Cuba as a relevant economic partner.
The article also refers to the possible rapprochement on intelligence issues and addresses the report about an expansion of Chinese espionage operations in Cuba. According to LeoGrande, this information is more a “story” than a real cause for concern. “It serves the interests of conservative Cuban Americans, who are always looking for reasons not to improve relations between the US and Cuba, and in the wider political community it serves the interests of those who think that China is a global threat.”
Translated by Regina Anavy for Translating Cuba.